Maduro’s Oil

  • The US capture and rendition of Venezuelan president Nicolàs Maduro have nothing to do with regime change and everything to do with securing access to Venezuelan oil.
  • Events in Venezuela are clear indicators of American “grand strategy” in the hemisphere. As this strategy begins to play out, Canada must understand the implications for this country, its security and its resources.
  • Lack of clarity around US plans for governance and security in Venezuela suggests that the country could be about to descend even further into violence and corruption.
  • Major US oil companies are not entirely convinced that their future lies in Venezuela. Some have characterized the country as “uninvestable.”
  • There could be opportunities for Canadian business in Venezuela, but an anarchic and unregulated environment translates into a critical level of threat and risk, to say nothing of real humanitarian concerns.

“Welcome to 2026”

The so-called “Trump Corollary” to the 2025 US National Security Strategy “went live” in the early morning hours of January 3, 2026. In an operation dubbed Absolute Resolve, American forces captured Venezuelan president Nicolàs Maduro and rendered him to the United States. Two days later, Maduro and his wife, Cilia Flores, appeared in a New York courtroom where, in a 25-page felony indictment, a federal Grand Jury charged them with a range of offences including drug importation, weapons, and narco-terrorism. Both pleaded not guilty. 

The Trump Corollary, discussed at length in previous CIBs, effectively claims for the United States the right to assert hegemony over the affairs of the Western Hemisphere, especially in the context of energy, critical minerals and other resources, and to deny access to those resources to foreign powers or interests. In a press conference announcing the capture of Maduro, President Trump proudly referred to it as a component of the “Donroe Doctrine” (a play on the Monroe Doctrine of 1812). Defense Secretary Pete Hegseth, added, “This is America first. This is peace through strength. Welcome to 2026.”

The Veil of Legitimacy

In the leadup to, and immediate aftermath of, Maduro’s capture and rendition, the US administration focused on his alleged drug trafficking and terrorist activities and, to a lesser extent, his history as a human rights violator (again, discussed in previous CIBs). Indeed, Canadian Leader of the Opposition, Pierre Poilievre (whose wife, Anaida Galindo, was born in Venezuela), congratulated President Trump for his arrest of “…narco-terrorist and socialist dictator Nicolas Maduro, who should live out his days in prison.” 

But opinion on the legality of Maduro’s capture and rendition remains deeply divided. In the United States many lawmakers have claimed that Absolute Resolve was a violation of Venezuelan sovereignty amounting to a kidnapping, and that legal mechanisms like memoranda of understanding and extradition should have been employed. Even some Republicans have expressed frustration that there was no consultation with the Senate Judiciary Committee prior to the operation. 

Meanwhile, many United Nations member states agreed that the Maduro presidency was illegitimate and repressive, which is true. But they also condemned his capture by the United States as a breach of international law, one that, in the words of a French diplomat, “…chips away at the very foundation of the international order…[and]…the principle of respect for independence and territorial integrity of states.”

Meet the New Boss…

In the Venezuelan diaspora – at almost 8 million souls, one of the world’s largest – widespread celebration of the fall of Maduro prevailed. But as an ostensible liberation force that has promised to “run” Venezuela “…until such time as we can do a safe, proper and judicious transition…”, the United States seems to be doing little to relieve the plight of the long-suffering Venezuelan people. Maduro has been replaced by his own vice-president, Delcy Rodríguez, who continues to maintain that Maduro’s capture and rendition was illegal. Both the interior and defence ministers, who together exercise complete control over Venezuela’s machinery of oppression, remain in their old positions. Meanwhile, police and security forces, backed up by loyalist militias, have been cracking down on “anti-regime” messaging and protests and imposing and enforcing curfews. So, for most Venezuelans, post-Maduro Venezuela seems like a whole lot of “same old, same old.”

Nationalization: Bad For (US) Business

Nicolàs Maduro, and his predecessors, Carlos Andrés Pérez and Hugo Chavez, have long been thorns in the flesh of the United States. In the aftermath of the 1973 Yom Kippur War, the Middle East-led Organization of Petroleum Exporting Countries (OPEC) imposed an embargo on countries that had supported Israel in the war. This caused global oil prices to increase by up to 400%, transforming Venezuela, with its massive oil reserves, into the richest country in Latin America virtually overnight. 

In 1976, then President Pérez nationalized the Venezuelan oil industry under a state-owned entity, Petróleos de Venezuela S.A. (PDVSA), although foreign (read American) oil companies were still permitted to partner with PDVSA in joint exploration and extraction ventures.  Then, in 2007, the “Bolivarian” Marxist president, Hugo Chavez, forced foreign oil companies in Venezuela to transfer their financial and infrastructure assets to PVDSA, effectively driving the biggest players, like ConocoPhillips and ExxonMobil, out of the country. Since then, Venezuela has consistently defaulted on international arbitration court ordered compensation payments totalling around $60 billion. Meanwhile, years of mismanagement, corruption, sanctions, and poverty, presided over by Nicolàs Maduro, have transformed Venezuela – and its oilfields – into barely functioning entities. 

All About the Oil

The Trump Corollary is not about regime change, nor is it about freeing the oppressed; it’s about resources. And the United States seems to be betting that by getting rid of Maduro, it has eliminated the primary obstacle to getting back everything that was “lost” under the last three Venezuelan regimes. Indeed, the US military pivot from blowing up putative Venezuelan “drug boats” in the Caribbean to seizing “ghost tankers” carrying Venezuelan crude is an exercise in consolidating US control over Venezuelan oil exports (and denying them to China, one of Venezuela’s biggest customers). And in the immediate aftermath of Maduro’s capture, President Trump announced that Venezuela would “turn over” 30 to 50 million barrels of oil to the United States, and that profits from its sale would be “…controlled by the President of the United States to benefit the people of Venezuela and the United States.”

Three Times a Charm?

None of this may be as simple as it seems, however. In a meeting with American oil industry executives, President Trump asked for $100 billion to rebuild Venezuela’s oil extraction and export infrastructure. The response was less than enthusiastic. ExxonMobil Chairman and CEO Darren Woods referred to his company’s long history in Venezuela, going back to the 1940s, then observed that “We’ve had our assets seized there twice…to re-enter a third time would require some pretty significant changes from what we’ve historically seen there and what is currently the state.” For most of the big players, Venezuela is a risky investment indeed, especially without a lot more security guarantees than the US government is currently offering.

Why This Is Important (1): American Grand Strategy and Us

It has been clear for some time that the United States and Venezuela have been on a collision course. But the capture of the Venezuelan president in his home, and his subsequent rendition to the United States, was a surprising, even shocking, development. Clearly, the 2025 National Security Strategy, and its “Trump Corollary” are much more than aspirational statements.  Together, they are clear expressions of the new American “grand strategy,” which the current administration intends to act upon. Previous CIBs have discussed Canadian assets and resources in the context of American interests. The challenge is readiness: determining when and how the United States will act and having a response in place. Hemispheric events are unfolding rapidly, if unpredictably. Canada is not Venezuela, or even Greenland, but we do have things that America wants. Understanding, and preparation for any eventuality, are key.

Why This Is Important (2): Canada and Venezuela

ExxonMobil is not the only game in town as far as oil extraction is concerned. The possibility of the opening and expansion of the Venezuelan oil industry is exciting, and may attract smaller investors and oil extraction companies, including Canadians. However, Venezuela is likely to remain a highly charged and volatile environment into the near and medium future, especially if the United States continues its laissez-faire approach to security. Indeed, this is one of the reasons some US oil executives have said that Venezuela is “uninvestable.” Factional political violence is also a real likelihood; especially if anti-regime factions begin to emerge. Foreign oil interests would be particular targets in this regard as it would not be difficult for either side to characterize them as carpetbaggers capitalizing on Venezuela’s misfortunes at the behest of the United States government. 

There is a moral element at play here, as well. The US administration remains unclear on how it intends to “run” Venezuela, although there are indications that it is planning to use private military contractors to protect oil and energy assets there. The field seems to be open for corporate interests to take over the country, much as the unregulated Boston- and New Orleans-based United Fruit Company effectively governed so-called “Banana Republics” like Guatemala, Costa Rica, and Honduras between the turn of the century and the 1950s. This would be a new and unfamiliar environment for Canadian business, with possible implications under the Corruption of Foreign Public Officials Act. 

Any significant increase in Venezuelan oil exports would depress Canadian oil prices in the US market, although given the factors discussed above, it could be some time before enough Venezuelan oil becomes reliably available for this to be truly problematic. However, some Canadian analysts see the possibility of increased oil flow out of Venezuela as real incentive to diversify Canada’s own oil exports and to go ahead with construction of a new pipeline out of Alberta and a tanker port in British Columbia. This would have real implications for both the environment and for First Nations sovereignty, however, and would be politically and economically disruptive, particularly given Canada’s international commitments under the Paris Accords and COP30.  That said, President Trump’s insistence that the USMCA is “irrelevant” may give us little choice, as Prime Minister Carney’s recent “reset” visit to China attests.